4 Programs for Buyers Without a Big Down Payment

As buying a home is the biggest purchase most people will ever make, buyers will look to you, their agent, to help them navigate the complicated world of financing their home. For many buyers, finding the required down payment money is the most difficult part of the process. For others, it may be more helpful to find a program that allows them to borrow without putting a lot of money down. Fortunately, there are a number of assistance programs for homebuyers that can help to lower the substantial upfront costs of purchasing a home. 

Let’s take a closer look at some financing programs you can recommend to buyers who might not have a large amount saved for a down payment:

1. Federal Housing Authority Loans

FHA loans offer the opportunity to borrow money with a low down payment (as little as 3.5 percent) and still access competitive interest rates. Also the federal program won’t penalize your buyer for having a low credit score. In order to qualify for this type of loan, your buyer must: 

  • Have verifiable income
  • Be able to afford the housing payment and any existing debt
  • Save at least a 3.5 percent down payment
  • Have an established credit history
  • Have a FICO score of at least 580 to 640
  • Purchase a home that does not exceed FHA loan limits

2. Veterans Administration Loans

VA home loans help service members, veterans, and eligible surviving spouses become homeowners. These loans are provided by private lenders, such as banks or other mortgage companies. The VA guarantees a portion of the loan, thus enabling the lender to provide your buyers with more favorable loan terms. In order to be eligible for a VA loan, one of the following criteria must be met:

  • Served 181 days of service during peacetime
  • Served 90 days of service during wartime
  • Served 6 years of service in the Reserves or National Guard

3. Rural Development Housing and Community Facilities Program

Lesser known than its counterparts, this program is administered by the United States Department of Agriculture and is designed specifically for lower-income individuals who either live in a rural community or plan to move to one. This program helps buyers by providing a cash subsidy to borrowers or by guaranteeing a no down payment loan, known as a Section 502 loan. 

In order to qualify for this type of loan, however, there are a few stipulations that must be met: the home must be 1,800 square feet or smaller, it must be the buyer’s main residence, and the borrower must meet certain income eligibility requirements.  

4. State, County and Local Programs 

There are also other down payment assistance programs that can be obtained at the state, county, or even local level. These assistance programs most often come in the form of either a grant or a loan that is known as “silent seconds.” A silent second is a no-interest loan that also doesn’t require a monthly payment to be made. 

To help your client find and secure these types of programs in your area, you can turn to State Housing Financing Agencies. These entities are chartered by the individual states and were established to help local residents secure affordable housing. AgentEDU can point you in the right direction for finding market data in your area.

To learn more about how you can better manage the sales process for your clients, sign up for our course Preparing Homebuyers to Buy today. 


AgentEDU® is a platform where agents at every level can come to watch 10-minute video courses for the many situations that successful agents must master. From essential to advanced level and everything in between, AgentEDU® courses help agents become top producers with increased earnings and a plan for continued growth.AgentEDU® is an Agent Publishing brand. For 18 years, Agent Publishing has been committed to providing residential real estate professionals with the information and training required to build successful and meaningful careers in their local markets. Agent Publishing’s influence extends to every career stage and reaches agents across print, digital, events and online learning.

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